A Limit Down Day to End the Quarter

I really wonder if tomorrow we will see a limit down day to end the quarter on the sp500.  Perhaps it is wishful thinking, perhaps not, but this market appears to be on weak foundations and I suspect these endless end of day rallies are orchestrated by the big players so that they can unload their inventory before the big dump. The market has played so many games the last month and a half constantly tricking both bulls and bears and not ‘giving in’ to the bearish trend.

So again I would not at all be surprised to see a limit down day tomorrow and an ugly Friday close.  This is an equal opportunity market.  It makes bears and bulls feel bad after the close and before the market open… So today it made the bulls feel good on the reversal, so how bout making the bears feel good in the A.M. ?

AAPL, PCLN and NFLX look quite weak and these where the lead sled dogs before, now they are acting like dogs.

The drop in demand for Ipad parts by the factory in China was spun by an investment bank to be a non issue, but I suspect it has to do with waning demand for Ipads.  I mean for crying out loud the entire world is raising taxes, cutting and shrinking government, cutting jobs, and now we need another Ipad ?

The 50 Day moving average on the sp500 appears to be gaining some downside momentum.  The bulls had better start closing this market ABOVE the 50 DMA soon, very soon, otherwise they will have to deal with an accelerated trend down.


Posted in SP500
12 comments on “A Limit Down Day to End the Quarter
  1. KT says:

    I think we’ll get a resolution soon. At least I hope so. The most common scenario (or at least the one most traders seem to hope for) is to go down past the low which people seem to think will then allow for a more straightforward rally. I hope it happens soon. Peter Brandt seems to think we are close. Maybe tomorrow? Maybe next week? I just wish I had played both sides today. What great moves for day trading.

    Here is a link to something a little beyond the technical, but if there is any truth in this it could send markets reeling …. I really don’t know what to think about this …


  2. Tom says:

    Thanks for the link KT, very interesting.

  3. jsd says:

    Now, it’s time to get ULTRA BEARISH. There are a number of new factors in place that may nearly force the market to tumble. 1) The VIX is a hair’s breath from breaking the neckline of the inverse head-and-shoulders, which stands at 38.14. A close above that could rocket the VIX above 56. 2) The SPX closed below 1136.07 which is below the neckline of the head-and-shoulders pattern within a triangle. 3) Several fund managers have already come out and said that they are reserving cash for a more reasonable level on the SPX, around 1050 and since this quarter is over, they have the luxury of making that happen.

    From a technical level, there are several ways to look at the data. Most of what I’ve heard assumes that the market has been in an uptrend with 2009 low being a pull back of that uptrend, so looking at the Fib retracement from that level gives us the next support at 1018. However, one could also observe that we are in a down trend that started at the high of 2007 and a retracement from the high of 2007, shows that the high of 2011 (1370) nearly reached the 78% retracement (1380).

    I rather like this view, because this view shows that we stopped descending exactly at 1121 (50%) and bounced back up to 1228 (61%) before heading back down again. That would give us the next target at 1014.

    Now if you really want to push the envelope out a couple of [hopefully] years, to see where we might end up, this view give us a very good opportunity to use Fib extensions. But don’t look at these numbers if you are faint of heart.

    The scary part is that the EU are stubbornly reluctant to cut Greece off. Especially the French, from which it can be inferred that they own the lion’s share of Greek debt. Once it is decided that Greece (and therefore French banks) can no longer exist on EU life support, they will be cut off, the banks will take huge losses, but there will be no more money to recapitalize those banks because it was all spent in Greece. On the other hand, if the link above is correct and the Germans pull out, there will still not be enough money to recapitalize the banks even if Greece gets no more money, because the EU will collapse and it will be every man for himself. France will be crushed, which will hit American banks harder than any of the PIIGS.

    So back to the Fib extensions, we see the 100% leve at 461. The typical 1.61 level, is off the charts. Basically that means the US would become insolvent and the USD would have to be scratched. Wait, this can’t be right!

  4. ed says:

    No way is Germany getting out out the EU regardless of what “Phillipa Mamagram” says.

    On the contrary. Germany designed the EU knowing full well that nations like Greece would go bankrupt and be converted in to “slave states”

    It has been the plan all along IMO. Don’t listen to the chatter designed to hide the truth

  5. KT says:

    Here is another link worth looking at:


  6. JR says:

    When will we have the day of the crash? October is the usual month and that only when September was substantially down.
    What do you think?

  7. ed says:

    How many for saw the crash of 1987? They almost always happen when no one expects them

  8. jsd says:

    Ed, I agree with your opinion that the Germans knew they would have ‘slave’ states in the EU. I’ve often thought that.

    JR, I don’t think we are looking at a ‘crash day’ any time soon. But I do think that we will see a slow bleed of the market for quite some time. Take a broad view of the charts from the 2007 highs and you will see how they moved lower for quite some time before the accelerated crash.

  9. ed says:

    Got tumbleweeds?

  10. KT says:

    Hope Tom is OK.

  11. Geoff says:

    KT – – would you be “ok” if you were consistently wrong? it is unusual that a blog that purports to “trade” has not had a posting in over a week – – but maybe, just maybe, the blogger is sticking with his short call and riding thru the upside movement on the premise that over intermediate term the market is going down – – if so, that would be a sign that the blogger is getting more “real”.

    but this blogger is extra-ordinarily “flightly” which i guess is to be expected since site purports to be for trading. ever wonder what happened to blogger’s “Cheetah” system which was rolled out about 9 months ago and promptly, very promptly died of neglect or something else.

  12. ed says:

    Looking for a continuation up for this next week. Would exit Friday to be safe

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